The Great Wealth Transfer has become a very popular topic in financial news. Over the next 20 years, wealthy families are expected to transfer trillions of dollars from one generation to the next as the older generation passes away. A lot of patriarchs and matriarchs of wealthy families are asking the same question: what does this mean for me and my family, and how can I benefit from it?
I don’t normally like to put a negative spin on these kinds of pieces, but it’s worth knowing what the Great Wealth Transfer will mean for your family if you don’t plan for it properly.
Review your estate plan and tax plan
The first place to look is your estate plan and tax plan. By being proactive and carving assets out of your estate now, you may be able to pass assets along to your spouse or your children before you die, and ultimately allow them to keep more of your estate rather than a larger share going to the federal government.
Families that don’t plan properly may end up giving a lot of money to the federal and state governments. And families who want their wealth to last for the next four or five generations may be doing themselves and their heirs a disservice by not planning ahead.
Put the right restrictions and controls in place
A second piece that goes along with estate planning is the ability to put restrictions and controls around how your family can use the wealth you pass on. You can lay out your expectations for your surviving spouse or your children, and by putting language into a trust that restricts the flow of those assets over a period of time, you can help ensure that the money lasts for generations.
Plan ahead to preserve your charitable legacy
If your family is charitably inclined and charitable giving is part of your legacy, that legacy can die with you if you don’t plan for what happens after your death. By being proactive now, putting together more complex trusts or foundations, and setting up successor trustees to step into your shoes, you can make sure your legacy of charitable giving continues into the next generation (or the next five).
Keep these considerations in mind as you approach the Great Wealth Transfer. Engage with your attorney, your accountant, and your advisor to make sure you’re doing the proper planning to help your wealth last for generations.
